MEP Infra targets highway projects, seeks private equity partnerships

MEP Infrastructure Developers, a toll collection and road maintenance company, wants to tie up with private equity or pension funds and bid for National Highway Authority of India (NHAI) projects, which are soon coming up.

The company, at the end of the last fiscal, had clocked revenues of ₹907 crore. It was listed in May and has a debt of about ₹3,000 crore.

Jayant Mhaiskar, Vice-Chairman and Managing Director, told

BusinessLine that the company was listed about five months back. The IPO proceeds of ₹261 crore were used for reducing debt. Today, MEP Infrastructure is not looking at any partners for reducing debt, but wants tie-ups with private equity (PE) and pension funds from countries such as Canada and Malaysia, for bidding fresh NHAI projects, he said.

He said in a few quarters, NHAI is coming up with Toll-Operate-Transfer projects, which has a fixed concession period of 20-25 years.

In such projects, MEP has better chances if it manages to bring in funding at lower interest cost. Therefore, MEP is already talking with two such funds, he said.

He pointed out that a number of operational Build-Operate-Transfer (BOT) road projects are having serious financial problems. In some projects, PE funds have taken stakes, and thus these projects are being operated by the PE funds team or through third party operators.

On the debt position, he said that MEP has ₹3,000 crore on the books, out of which ₹2,500 crore debt is on a single project.

This project will run for another 11 years and within nine years the debt (₹2,500 crore) will be repaid. The balance debt of ₹500 crore was for working capital and other operational requirements.